Facebook is growing by leaps and bounds, for the first time surpassing Google in popularity this spring, according to the web analytics company, Hitwise.  More than 400,000 users log into their Facebook accounts daily to post updates and photos, play games and interact with social and business contacts.

With the popularity of Facebook continuing to surge, Facebook ads have become a uniquely effective way to advertise online.  The ad appears on the sidebar of user’s Facebook page, and includes a headline which is hyper-linked to your website or Facebook page, an image, 135-character message, and a spot that displays Facebook connections who “like” the ad as well as a “like” button for those who view the ads to weigh in as advocates.

Facebook ads can be targeted in a number of different ways: age, gender, marital status, geographic area by country, state or city; education level and even selected schools, and interests.  So if you were opening a fitness center in Phoenix with a target market of busy corporate executives, you could select men aged 30-55 within 25 miles of Phoenix who are college graduates and have listed fitness as an interest in their Facebook profile.

Facebook is now offering a beta version of ad tracking, which reports on the number of views and the number of click-throughs on your ad.  Not getting the results you want?  You can edit your ad at any time to tweak it and improve results. The cost of the ads is based on bidding for either cost per click (CPC) or cost per thousand impressions (CPM).  CPC is recommended when your goal is actual purchases or registrations, while CPM is great for just increasing exposure and awareness of your company.

One powerful benefit of Facebook ads is the “like” feature in the ads. In a study on Facebook ads done by Nielsen, purchase intent increased from 2% to 8% when a Facebook user advocated for an ad – so users are four times more likely to purchase.  The study also showed that ad recall increased from 10% to 16% and awareness doubled from 4% to 8% by including this form of social advocacy.

If you are not capitalizing on the popularity of Facebook, you may just be missing out on one of the most effective ways to advertise in the online age.

Facebook offers a great resource for testing ads: http://ads.ak.facebook.com/ads/FacebookAds/FB_Ads_A_B_Testing.pdf